Congressman Peter Welch says he’s pessimistic that Congress and President Obama will be able to reach agreement on a deficit reduction package by the end of the year but Welch doesn’t think "driving" over the so called "Fiscal Cliff" will hurt the economy as long as a solution is found in January.
If there’s no agreement on a new deficit reduction package by the end of the month, a series of tax increases and across the board budget cuts in domestic and defense programs will go into effect.
Welch says it’s now unlikely that a compromise will emerge because House Republicans will try to block any plan that includes raising tax rates on the wealthy. But Welch is optimistic that the new Congress in January will vote to extend tax cuts for everyone making less than $250,000 a year.
"If we have to go into the first week of January to address the tax side the revenue side it’s not a cliff at all," said Welch." It’s something that could take effect and provide that tax relief for middle class families 98 percent of Americans and be done right away then we would go on and continue to have the debate about the spending side.
House Republicans also want to include reforms to the Medicare program as part of the overall agreement. These are reforms that could include raising the eligibility age of Medicare from 65 to 66 or 67 over a period of ten years.
Welch says there’s a better approach to save money in Medicare. He wants the federal government to be able to negotiate drug prices with the pharmaceutical companies and he supports a payment reform plan that moves away from the traditional "fee for service" model.
"All of that is about saying that we have to have structural reform in our health care delivery system. The other approach is to leave a bad system in place that is out of control expensive and think that you’re solving the problem simply by slashing benefits to beneficiaries who have no control whatsoever over how the cost of health care impacts them."
Welch also wants Congress to pass a public infrastructure bill that would provide billions of dollars to improve roads and bridges, and the plan would also help expand broadband services in rural parts of the country.
"You have to have infrastructure in order to have a vibrant economy and it’s a legitimate reason to borrow money for capital expenditures," said Welch. "And in the case of public infrastructure it’s used by generations so there are some areas where it makes sense to borrow and to spend when it is for long term investment that will enhance the strength of our economy."
Welch and other members of Congress are trying to include a new 5 year Farm bill in any deficit reduction compromise. He says this is an appropriate thing to do because the Farm legislation will cut federal spending by $23 billion over the next 10 years.